Misclassification of Imported Medical Imaging Printers: CESTAT Upholds Differential Customs Duty Demand On Importer [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the customs duty demand held that the company had incorrectly classified imported medical imaging printers under a tariff entry attracting lower duty.

The Tribunal held that the imported goods were primarily used for printing purposes, used to generate images for diagnostic purposes, and hence could not be classified under the category claimed by the importer for availing a concessional rate of duty. The demand of differential customs duty raised by the department was hence sustained.

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The customs department on scrutiny of the entry found that the imported goods were actually printers with the capability of producing high-resolution medical images and therefore, should be classified under a different tariff heading.

Further,the importer claimed that the printers were integral parts of medical diagnostic equipment and were designed for medical imaging purposes. Therefore, they should be classified under the tariff heading for medical equipment.

The customs department on the other hand claimed that the printers were used for the main purpose of printing images generated by diagnostic equipment and therefore, should be classified as printers under the appropriate customs tariff entry for printers rather than medical equipment.

After considering the technical specifications, functionality of the imported items, and the relevant tariff items, the Tribunal noted that the main function of the items was to print diagnostic images, rather than conducting any diagnostic activity.

The bench comprising Justice Dilip Gupta [President] and Hemambika R. Priya [Technical Member] held that the classification made by the customs authorities was appropriate, while the concessional classification claimed by the importer was wrong.

Therefore, the Tribunal upheld the demand for differential customs duty and dismissed the appeal made by the importer.

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